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He either speaks about housing or he speaks about nothing. Today's the day.

Throughout the last three years of incredible calamity, President Bush and his minions never told the truth. They never said, "We must find ways to keep people in their houses and raise the value of homes."

They talked about lowering mortgages. They talked about redoing mortgage loans but never did anything about it. They talked about buying bad mortgages from banks and never made the move. They talked about making

Fannie Mae

( FNM) buy more mortgages, and it never did. They talked about everything but supply and demand and the inventory of homes and house price depreciation.

And their ignorance is why we are in this fix. At the core of this whole downturn are the instruments that contain billions of dollars in mortgages. If they were ever to stabilize, we would have a whole new world where a bank's losses would not be inevitable as they are now. The reason why the

UltraShort Financials ProShares

(SKF) - Get Report

can be used to destroy every bank in it, particularly now that

Bank of America

(BAC) - Get Report

and

Citigroup

(C) - Get Report

hardly represent enough "equity" to knock them down, has to do with the obvious recognition that every mortgage issued since 2005 --

every last one of them

-- has an increasing likelihood of defaulting,. Everything, from today's bad

State Street

(STT) - Get Report

news to the radical fall of

JPMorgan Chase

(JPM) - Get Report

and

Wells Fargo's

(WFC) - Get Report

stocks, has, at its heart, house price depreciation.

If Obama does not attack this issue square on with twin initiatives to sop up inventory with a one-time tax credit of $25,000, enough basically to get a new homeowner off the sidelines to buy a $200,000 house (where the average price is headed), then the banks will continue to default, and the problem will never end. Plus, the wealth effect will continue to diminish because the stock side and job side of the ledger are so bad.

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He also must be very careful to provide

no aid

whatsoever to the homebuilders. Unlike banks, which are needed to provide credit where there is virtually none outside of what the government guarantees, homebuilders are the enemy, still pumping out homes to satisfy bank creditors and to attempt to monetize inventory,

even

as they make very little money per home.

If he puts in that credit and then says that the government will buy any foreclosed mortgage from any bank that wants to offload them in a new organization that could put hundreds of thousands of white collar people to work, we could stabilize this monstrosity of an issue

this year

, in time to start thinking that the bottom has been put in. Without it, we can expect nearly every single bank in the country to go insolvent just like 1932, and the comeback will not come for years and years and will plague the administration throughout its whole first term.

Only Sheila Bair seems to understand this linkage. She is not elegant like Tim Geithner, whom people are finally starting to realize is an apologist for Wall Street and whom pretty much does everything in an ad hoc fashion and has

never

supported any serious initiatives to attack the housing issue root and branch. If she is given a chance to exploit this moment, we are going to get out of this jam.

If Obama doesn't speak directly to housing,

not

just jobs, then you know the UltraShort Financials ProShares is the only place to be.

At the time of publication, Cramer was long JPMorgan Chase and Wells Fargo.

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